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This is referred to as the "fast fashion" business model. H&M and Zara in Europe has been doing it for quite a while already. Wikipedia article here: http://en.
by matsiyatzy 15y ago
This is referred to as the "fast fashion" business model. H&M and Zara in Europe has been doing it for quite a while already. Wikipedia article here: http://en.wikipedia.org/wiki/Fast_fashion http://en.wikipedia.org/wiki/Fast_fashion
It's not so surprising that they go for this business model, since "fast fashion" retailers have an average profit margin of 16%, compared to 7% for typical retailers, at least according to this source: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CEgQFjAC&url=http%3A%2F%2Fwww.igi-global.com%2Fviewtitlesample.aspx%3Fid%3D55212&ei=KTEkT7mFNOiE4gSmg9ycCQ&usg=AFQjCNFqEtCUAGjKwf20s8OhZlJM3S23cw&sig2=DTTdgCx_0KORIy26dRVxpQM http://www.google.com/url?sa=t&rct=j&q=&esrc=s&#...
Basically it's "just-in-time" production coupled with "agile"-type response with regards to fashion trends and customer wants.
- windsurfer 15y agoI find it really surprising that their profit margins are so small, considering that the actual physical product is so cheap to produce.
- matsiyatzy 15y agoI would expect a significant part of costs to be rent, as stores typically are in relatively expensive locations. And there's also considerable loss due to unsellable excess inventory, which is what the "fast fashion" business model tries to reduce.
- hammock 15y agoNot sure if that's entirely accurate. JCP is a mall anchor/dept store, not an H&M or a Zara. They sell other makers' labels. And this announcement seems relegated to the pricing domain, haven't read anything about them changing their production/distribution model.
- matsiyatzy 15y agoI wasn't aware of that. That probably means the ideas behind this is a bit different, yes.
- jamesbritt 15y agoThey do have their own in-house items as well, though it's not all they offer.